third of three articles
case of Caracol
Robert Etienne looks out with dismay at the fence
cutting through his field in Fleury, near Caracol, in Haiti’s
Northeast department. Earlier this year, he had a healthy crop
of beans coming up through the rich, black soil.
“The first week of January,
tractors moved across all this area and broke down everyone’s
fences,” the septuagenarian told Haiti Grassroots Watch (HGW)
during a June, 2011 visit. “Thieves and animals followed, and
our crops were gone.”
Etienne brought up his four children right here, by
raising animals and farming a small family-owned plot and a
larger plot he leased from the state. Along with hundreds of
other farmers in this community , he woke up one day last
January to discover his fields had been destroyed.
Unbeknownst to Etienne and other farmers, that same
week the Haitian government (GOH) signed an agreement with U.S.
Secretary of State Hillary Clinton, representatives of the
Inter-American Development Bank (IDB), and the Korean textile
giant Sae-A Trading. With those signatures, Etienne’s land and
about 300 other plots were converted into an industrial zone.
“This will be the match that strikes a fire, and
gets things going,” Hillary’s husband, former U.S. President
Bill Clinton, told the Wall Street Journal. Clinton, who
at the time headed the Interim Haiti Recovery Commission (IHRC),
has long-championed plans to bring more industry to Haiti.
But farmers like Etienne, along with labor leaders,
environmentalists and economists, are all wondering – just what
“fire” has been lit and when “things get going,” what “things,”
and where will they “go?”
Also, why was Caracol chosen?
All parties agree that the site – which is part of
the Trou du Nord River watershed – is one of the most fertile
spots in the Northeast Department. The new industrial park will
also be located only about five kilometers from a large bay
which is home to one of the country’s last mangrove forests and
extensive coral reefs.
In order to find out why Caracol was chosen, and to
get a better picture of the potential “winners” and “losers” in
the project, HGW visited the Northeast, reviewed a half-dozen
studies, and interviewed numerous experts and potential
PIRN - A
The Industrial Park of the North Region (Parc Industriel de la
Région Nord - PIRN) is the showcase reconstruction project for
the new government, the CIRH and the “international community”
in Haiti – U.S., France, Canada, the European Union and the IDB.
The 243-hectare industrial park is slated to open in March 2012.
Planners say some 20,000 people will be hired for “Phase 1,” and
that up to 100,000 new direct or indirect jobs, the overwhelming
majority of them sweatshop wage-level assembly jobs, will be
created over the next few years.
In the planning stages before the earthquake, and
with an initial price ticket of over US$200 million, the PIRN is
the result of a “public-private partnership.” But the
Government of Haiti (GOH) is not the only “public”
The “public” to the north – U.S. citizens –
is the project’s biggest investor, providing some US$124 million
in U.S. tax dollars. That financing that will be used (according
to project documents) to improve nearby port infrastructure,
build a electricity plant to supply power to the PIRN, and build
at least 5,000 units of housing.
As Bill Clinton implied, foreign investment is a key
part of the economic plan he and the Haitian government are
pushing. Washington is doing everything it can to help assure
Haiti is “open for business.” Thus, at a briefing on Jan.
7, 2011, U.S. AID Director Cheryl Mills was proud to report that
her team had “been working through
with foreign investors on how we could go about attracting them
to an industrial park.”
In addition to U.S. tax dollars, the PIRN is also
being funded by the IDB to the tune of US$50 million. The IDB
money will be used to build “factory shells and
inside-the-fence infrastructure,” according to U.S. State
The use of taxpayer dollars to subsidize private
business is nothing new. “Public Private Partnerships”
(PPP) are common the world over. The taxpayers take risks to
make a location or a sector attractive for private capital. And
while the overall logic and justice of PPPs in general could
certainly be debated, the specifics of this PPP really stand
out. It goes further than most. It uses tax dollars – mostly
from the U.S. – to benefit textile and clothing companies that
are not necessarily American, and every job created there will
likely result in lay-offs of workers in U.S..
Ultimately, in the case of the PIRN at least, U.S.
taxpayers are making it easier and cheaper for foreign and local
clothing and textile companies to set up (sweat-)shops in Haiti,
lay off better paid workers in the U.S. and other countries, and
increase their profits. If Levis and the GAP can get their
clothes stitched in a place that pays $5 a day rather than $9 an
hour (approximately the lowest wage paid in US-based clothing
factories), with new infrastructure, electricity, UN
“peacekeepers” to provide security, and tax-free revenues and
other benefits, why not?
Ironically, the main private partner in the
PIRN is not Haitian or American. The partner is South Korean
textile giant Sae-A Trading, which promises to spend $78 million
to build a 50,000 hectare factory complex that eventually
employs 20,000 workers (in the first phase) and which will
eventually include a textile mill that will do knitting and
Sae-A Trading is one of the worlds larger apparel
makers, supplying GAP, Wal-Mart, Target, and other major U.S.
retailers. The company has been building factories and textile
mills around the world at record pace recently: Nicaragua,
Indonesia, and now Haiti. One of the largest clothing
manufacturers in the world, a 2009 article reported that its
exports – all to the U.S. – were valued at about $885 million.
“Our 20 factories worldwide produce 1.4 million
pieces of clothing a day and the annual production rate is 360
million pieces,” founder Kim Woong-ki told the Korea
JoongAng Daily. “That number is nearly equal to the U.S.
But Sae-A Trading is not investing in Haiti to “create
jobs,” as the fans of assembly industry-based “sustainable
development” – like Haitian President Michel Martelly –
claim. The company is moving in to make more money. Sae-A will
be in perfect position to take advantage the
Economic Lift Program (HELP) Act
– that allows textiles to enter the U.S. from Haiti tariff-free,
and then of the recently approved US-Korea Free Trade Agreement
(KORUS FTA). Sae-A Trading is setting up shop just in time.
Approved by Congress in October, KORUS FTA – which
could go into effect as early as Jan. 1 – will immediately
reduce tariffs on most Korean goods to zero, with more
reductions coming in five and ten years. A 2007 study by the
U.S. International Trade Commission estimated the agreement “would
likely result in a significant increase in bilateral U.S.-Korea
trade in textiles and apparel, particularly U.S. imports from
And therefore, most likely, a further decrease in
employment in the U.S. textile and apparel sector.
before the earthquake, the GOH and its supporters targeted the
north of Haiti for an industrial park because of its proximity
to the U.S. and to the Dominican Republic. According to various
government and consultant documents, a good site needs access to
a large unemployed population, an abundant water supply,
electricity, and major highways.
The U.S.-based Koios Associates consulting firm,
hired to help choose a site, also noted that the north region
was a great place because “the area has large stretches of
relatively empty land.”
Of course, “relatively empty” is a relative
term, as will be shown below.
The Koios study – dated Sep. 20, 2010 – recommended
18 possible sites, with the Caracol site ranked #2 of 18.
“The river to the east of the site has
substantial perennial flow and is likely to be suitable for
factories using substantial water and requiring discharge of
treated water. The land is devoid of habitation and intensive
cultivation,” the report stated.
Except, it wasn’t quite “devoid.” The Caracol
site was home to 300 farming plots.
But the site was chosen anyway. According to a
subsequent Koios study – dated May, 2011, and entitled “Study
of the Environmental and Social Impacts – Industrial Park of the
North Region of Haiti” – the Caracol site was selected by
the GOH because of:
Trou du Nord River - “it is capable of absorbing a large
volume of treated water,”
abundant subterranean water supply,
of the land belongs to the State, meaning that it would be
easier to kick off the farmers.
their second study, Koios admitted that the site was actually
home to “good agricultural lands.” But it was too late by
then. Farmers had been evicted and a fence put up.
Asked after the fact by the Ministry of Environment
(MOE), Caracol Mayor Colas Landry said he disagreed with the
choice of the spot.
“If I were consulted by the project promoters, I
would never propose that site,” he told the MOE in an
internal report leaked to HGW. “I would orient them to
Madras,” a less-used area nearby.
(According to Haiti’s Free Trade Zone Office, Free
Trade and Industrial Zones should not be set up on farming land.
In an interview with HGW, the Office’s Luc Especca insisted on
the point, saying “We all remember what happened with CODEVI.”
The CODEVI Free Trade Zone, built on the fertile Maribahoux
Plain, caused considerable upheaval and protests in Haiti and
about the environment?
Shockingly, the second Koios study also admitted that “the
study process and the section of sites was not accompanied by
extensive environmental, hydrologic or topographic research.”
Indeed, a comprehensive internal MOE report obtained
by HGW confirmed that, noting that “at [no] moment was the
MOE associated in any thought in the identification of the
The report – subtitled “To what extent and under
what prerequisite a win-win situation could be envisaged from an
environmental point of view” – also noted that the PIRN
could have “potentially great adverse impact on the
Apparently, the Koios team agreed.
When the firm took a closer look at the site in its
second study this past spring, it suggested the GOH change the “risk
rating” for the project from B, or “medium,” to A
which – according to the MOE document – means “significant
adverse environmental impacts.”
In addition, Koios noted that a more detailed
environmental and social impact would be necessary. The
consultants suggested that while the more thorough study is
conducted, the GOH should “impose certain limits to the
industrial activities authorized in the park during the first 12
to 24 months of operations.”
Koios also noted that the region is also home to the
significant indigenous archeological sites, and some of earliest
European settlements in the hemisphere. The firm went so far as
to make two other, even more radical, suggestions: 1 - Move the
project to another site in the north or even a completely
different region of Haiti, or 2 - Cancel the project, although,
the consultants remarked, “[i]ts cancellation could call into
question the reputation of the parties concerned and could harm
the reputation of Haiti as a country that welcomes investment.”
Not surprisingly, the PIRN was neither moved nor
And, two months after the Koios report came out,
perhaps seeking to downplay the environmental aspect, the
Ministry of Economy and Finance (MEF) bought several one-page
ads in Le Nouvelliste where it reported that “environment
issues have been considered with a great deal of attention”
and claimed that more studies were underway. A month later, the
IDB’s Eduardo Almeida said everything was ready to move forward
since “[e]nvironmental impact studies… have already been
completed in the region.”
Indeed, the project is moving forward. On Nov. 28,
the major actors flew to Caracol to inaugurate the site.
Clinton, Martelly, Sae-A Trading, the BID – they were all there.
“Haiti is open for business,” Martelly said
as he stood in front of a giant architect’s schematic drawing of
the factory zone. “This is the kind of change we need.”
But what about the risks identified by Koios and the
Ministry of the Environment? Are more studies taking place or
not? Will limits be imposed on the PIRN’s tenants during the
first 12 to 24 months? How did the MEF – the main ministry
shepherding the PIRN and the one that commissioned the Koios
study – react to the Koios recommendations and the MOE report?
Industrial Park in Caracol: A win-win situation?
the Haitian Ministry of the Environment warn of “potentially
great adverse impact” from the PIRN being built in Caracol
with over $200 million in public and private financing?
Why did the consultants’ study call the nearby
Caracol Bay “unique, productive and precious” and say
that even if all regulations are followed, the PIRN “could
endanger this ecosystem?”
Why did the same consultants – who originally
suggested the Caracol site, but who later admitted they did not
take environmental considerations into account – tell the GOH to
consider moving or even cancelling the project?
These are all relevant and urgent questions.
But even though two extensive environmental and
social impact studies – listing numerous risks – are public and
posted online, and even though there are also several other
studies on the Caracol Bay marine habitat available, no Haitian
or foreign media outlet (except Haiti en Marche) has
looked further than the press releases from the project’s
champions and investors: the U.S. State Department, the IDB, the
GOH and Sae-A Trading.
Instead, the Wall Street Journal, Miami
Herald, Associated Press, Le Nouvelliste,
Haiti Press Network, and others are largely cheerleaders for
the PIRN and the mostly sweatshop wage jobs it will provide.
It comes as no surprise that there are numerous
environmental and social risks associated with any industrial
park – “free trade” or not. But these risks are
exponentially greater in poor countries due to poor zoning, lack
of legislation and/or government control, large unemployed
populations, etc. This does not mean a project should not be
undertaken, but studies should be done and the benefits vs.
risks put before the public.
As noted above, studies were done, including
one released May 13, 2011, by Koios Associates, hired by the MEF
in 2010 and a second one, released on Aug. 5, 2011, and
commissioned by one of the project’s major investors, the IDB.
Both studies have potential conflicts of interest:
Koios chose the site in the first place, and the IDB is donating
or loaning over $50 million for the PIRN. But it appears the
potential conflicts of interest, and the numerous risks outlined
in the documents, were not of significant concern to the
power-brokers. Construction has started and a $15 million power
plant contract was awarded in September.
HGW lacks the space and the human resources to list
all the sources and fully list all the risks, but here are some
of the major ones:
- The Caracol Bay environment
the most obvious risks are the dangers to Haiti’s fragile
environment, specifically the Caracol Bay.
The original, MEF-commissioned study recommending
sites for the PIRN was done by the Koios group, whose 110-page
study identified the Caracol site as #2 out of 18 possible sites
in the north. However, Koios’ own follow-up Environmental and
Social Impact Study, in May, 2011, admitted – shockingly – that
the environment had not been taken into consideration the first
Also, equally astoundingly, in their impact study,
the Koios team claimed that “It wasn’t possible to anticipate
the presence of the complex and precious ecosystem of the
Caracol Bay before we conducted this environmental evaluation.”
The claim is nothing short of outrageous. The bay –
home to mangrove forests and the country’s longest uninterrupted
coral reef – has been the subject of international study for
some years and is part of several plans to make the region into
a park, according to publicly available documents.
2009 study for the Organization of American States and the
Inter-American Biodiversity Information Network (IABIN) put the
“value of ecosystem services” of the mangroves and coral
reefs in the bay at US$ 109,733,000 per year.
2010, the UN Development Program and the Haitian MOE initiated
plans to set up a “National System of Protected Areas (SNAP).”
Over US$2.7 million has been invested in the program already,
according to the MOE. One of the first areas on the list is the
bay also lies in the Caribbean Biological Corridor (CBC), an
area designated by Dominican Republic, Haiti and Cuba back in
2009, and is part of that US$7.4 million project.
Even if Koios somehow “missed” the literature
on the bay, the Interim Haiti Recovery Commission (IHRC),
co-headed at the time by Bill Clinton, cannot claim ignorance.
In October, 2010, the IHRC approved $1 million of the CBC’s $7.4
million in funding. That was two months before the
Commission approved the PIRN.
risk involves water usage and water pollution. The PIRN is
located in the middle of the Trou du Nord River watershed,
identified as a “priority watershed” in a recent study
from the US Agency for International Development.
Water for the PIRN and surrounding settlements will
likely be drawn from the river and the water table. One study
however, by a Washington-based firm commissioned by the IDB,
recommends that water is taken from the water table only because
the Trou du Nord River empties into the fragile Caracol Bay.
Writing in August, 2011, the Environ International Corporation
said: “We strongly recommend using underground waters to meet
the needs of the site.”
But other studies noted that if too much water is
taken from the water table, it could be polluted by salinity due
to an intrusion of saltwater from the Atlantic Ocean.
Over-exploitation of the water table could also harm agriculture
in the region at large, and make it difficult to develop other
water-needy businesses, such a tourism. The Environ group
disagreed, saying there was ample water.
A study by the Louis Berger Group, commissioned by
the MEF and quoted in the Koios study, recommended that water
come from both below ground and from the river. The study said
the PIRN and surrounding population (current and new) should not
use more than 11,000 cubic meters per day. According to the same
study, the park will likely need at least 5,800 cubic meters of
water per day during Phase 1 (2012-2014) and at least 9,800
cubic meters during Phase 2.
(An internal study from the Ministry of Environment
– leaked to HGW – called these estimates “conservative”
and “minimalist,” saying they don’t take into account
continuing deforestation and projected exponential population
growth. More on that study below.)
The other great water-related risk is, of course,
pollution or other negative impact from the use of water from
the river and water table. Here are the main ways water will be
the textile factory being built by Sae-A Trading Company – A
large amount of water is needed for the manufacturing and dying
processes. There will be significant waste waters needing
cleaning and other processes at the Sae-Trading and other
apparel factories, and possibly for a furniture factory.
(Origins Holdings has been listed in some documents as a
the drinking, cleaning and waste treatment needs of workers and
other staff, some of whom will live inside the PIRN confines,
while others live nearby.
the drinking, cleaning and waste treatment needs arising from
the tens of thousands of new residents the PIRN is expected to
attract to the region.
A waste treatment plant is planned for the park, but
while all of the dye run-off, industrial waste and human waste
can hypothetically be managed with proper treatment, all waste
waters – clean or not – will eventually end up in the Trou du
Nord River and probably the Caracol Bay.
“Even if the wastewater of the park are treated,
there are various other dangers related to the development of
the industrial park on this site which could put the ecosystem
in danger,” the Koios consultants noted.
Water will also be used to cool the electrical plant
being paid for by the U.S. government. The plant - being build
for US$15 million by a Canadian company – will generate
electricity using “heavy fuel oil,” also sometimes called
“bunker fuel.” When dumped back into the Trou du Nord
River, the temperature of water used to cool the turbines must
not be more than 3 degrees centigrade different than when taken
out, or it could have significant negative impacts on aquatic
ecosystems. Needless to say, the use of oil in that fragile
environment also poses a risk.
Koios study estimates that the local population could grow by
between 100,000 and 300,000 people: “Large industrial or
mining projects in poor countries indicate that a large
migration like this could occur, no matter what efforts are
taken to prevent it.”
Other studies put the number of potential migrants
much lower, but even the addition of 10,000 workers and their
family members – 50,000 people – will change the region,
currently home to about 250,000 people, mostly farmers and
Without zoning laws, urban planning, and heavy
police presence, the PIRN might give birth to a new set of
slums. The country has already witnessed the “slumification”
of areas around industrial parks in the capital and in
Ouanaminthe, home to the CODEVI park, and it is likely a similar
process will occur again.
The sudden arrival of thousands can have numerous
negative impacts – more waste, uncontrolled use of water and
trees (for cooking needs), and squatter settlements on farmland
or in environmentally fragile areas. (U.S. tax dollars are going
to be used to build 5,000 homes, but these appear to be slated
for “expatriates” and management.)
Also, the Koios consultants noted: “There is… an
elevated risk of tension between members of local communities
and migrants coming to the region, especially if local residents
feel they don’t have the opportunity to profit from the project,
especially in terms of jobs.”
The Koios study warned that the negative
repercussions of such conflicts might effect factory owners
bottom lines, too. “Local and overseas criticism of the
multinational companies operating in the park, as well as
negative publicity vis-à-vis relations with the local
communities (bringing about costly consumer boycotts, lawsuits,
and other expensive consequences in terms of reputations and
legal risks) are among the greatest consequences of bad
management,” the report says.
Mitigating the risks
surprisingly, despite the risks they identified, the Koios, IDB
and Environ studies all ended up endorsing the project. However,
they also listed numerous steps that need to be taken in order
to minimize or eliminate the risks. For scores of pages, the
consultants outline laws to be voted, programs to be followed,
and constructions that include the immediate creation of a
marine protected area, an extensive 12 to 24 month environmental
study, funding and building infrastructure and housing for the
expected migrants both inside and outside the PIRN, and other
Koios also optimistically wrote that “if a
sufficient portion of the additional tax revenues are spent on
development and on the improvement of the social and physical
infrastructure in the region, many of these negative effects can
be avoided or diminished.”
Indeed, massive funding could help mitigate risks.
But Koios appears to have forgotten that PIRN tenants – textile
giant Sae-A and other companies – won’t pay any taxes at all for
15 years, meaning that all the “supplementary tax revenues”
will need to come from factory workers, most of whom will earn
little more than $5 a day, who will thus be tax-exempt.
But even if the necessary funding is located, some
critics, including the man currently serving as Environment
Minister, say the recommendations don’t even go far enough.
In his 20-page report assessing the Koios study,
dated Jun. 30, 2011, Joseph Ronald Toussaint said the document
was a positive step but that it underestimated the “magnitude
of impact,” “extent of impact,” “duration of
impact,” and “biophysical changes.”
Then a ministry employee, Toussaint also said that
Haiti’s then Environment Minister was not “associated in any
thought in the identification of the site” [sic] nor in the
terms of reference for the Koios impact study. As noted above,
Toussaint also noted that the water-use estimates were too “conservative.”
Still, Toussaint’s report claimed a “win-win”
situation was possible, if some $54.5 million in studies and
mitigation efforts were implemented.
What did the MEF think of the recommendations and
were they followed? In August and September of 2011, HGW tried
repeatedly to meet with both then-Minister of Economy and
Finance Ronald Baudin, and with Toussaint, and even obtained
promises of interviews from both offices. In the end, however,
both offices refused to speak to journalists.
Maybe the MOE has given up its struggle to protect
the bay? No MOE representative was present at the Nov. 28
inauguration of the PIRN construction site. The environmental
question and the Bay of Caracol were not even mentioned.
Caracol residents think?
Renel, like most people in and around Caracol, is a farmer. He
other farmers who lost their crops last January have formed an
association called Association for the Defense of Caracol
Workers (ADTC in French).
“The spot they picked for the industrial park is
the most fertile part of the department,” said Renel,
president of ADTC. “We grow a lot of plantains, beans, corn,
manioc, etc. That’s how families raise their children, educate
their children… its like our ‘treasury!’”
But Renel and other local residents are not opposed
to the park. On the contrary, they are hopeful they and their
children will get some of the jobs officials and consultants
have described. Some local people already have been hired – as
guards or workers at an information kiosk.
According to the PIRN website, all farmers have also
received either land or remuneration for their lost crops or –
if they were owners – the value of their land. While the PIRN
website says all farmers have been paid damages, in a recent
telephone interview, several denied this, saying they were
originally promised land and money. Also, some say they
were not paid the amounts originally promised.
“They told us peasants would get land and cash,
and according to Michaël De Landsheer [of the MEF], landowners
were supposed get US$1200 per hectare, but they are not
respecting their word,” Renel told HGW.
Farmer Robert Etienne is excited about the
factories. “They should have built something like this
already!” he said, his eyes glittering. “Because there’s
no work in this country.”
But Etienne, in his seventies, won’t be one of those
hired. He is too old. Maybe his children will get jobs? Maybe,
maybe not. There will be stiff competition, even with their
Etienne and Renel and others are probably unaware of
the how low salaries will be, and of how the local economy will
likely change as construction moves forward and the factories
start to open up: population explosion, higher rents, a grown in
the “informal sector” and street merchants, lessened
local agricultural production and perhaps even higher food
As noted earlier, assembly factories with sweatshop
wages are not social projects, despite claims made in the media
and in studies. The Koios study, for example, claims the PIRN
will supply the “means of subsistence to a maximum of 500,000
people, that is 10% of Haiti’s population.”
The claim is very difficult to substantiate. Most
workers will earn a wage that can’t even pay the rent, much less
send children to school.
In the very same study, the authors also offer up
this more honest appreciation: the PIRN “was above all
conceived to facilitate investment in enterprises.”
As previously described, Sae-A and the other textile
factories are moving to Haiti in order to take advantage of
cheap labor, no U.S. tariffs until 2020, a long tax holiday in
Haiti, and proximity to the U.S. market. The PIRN is part of a
global economy predicated on the exploitation of the lowest
wages and a “race to the bottom.”
Are exploitation, potential environmental
devastation and social upheaval really a “win-win”
situation? Is it just to spend US$179 million in foreign public
financing in Haiti, to the possible detriment of workers in
other countries? Can a “new” Haiti really be built on
sweatshop wages and free trade zones?
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